Sempra’s Condensed Consolidated Financial Statements include the accounts of Sempra Energy, a California-based holding company doing business as Sempra, and its consolidated entities. In the fourth quarter of 2021, we formed Sempra Infrastructure, which resulted in a change to our reportable segments. Historical segment disclosures have been restated to conform with the current presentation of our four separate reportable segments, which we discuss in Note 12. All references in these Notes to our reportable segments are not intended to refer to any legal entity with the same or similar name.

We have prepared our Condensed Consolidated Financial Statements in conformity with U.S. GAAP and in accordance with the interim period reporting requirements of Form 10-Q and applicable rules of the SEC. The financial statements reflect all adjustments that are necessary for a fair presentation of the results for the interim periods. These adjustments are only of a normal, recurring nature. Results of operations for interim periods are not necessarily indicative of results for the entire year or for any other period. We evaluated events and transactions that occurred after March 31, 2022 through the date the financial statements were issued and, in the opinion of management, the accompanying statements reflect all adjustments necessary for a fair presentation.

All December 31, 2021 balance sheet information in the Condensed Consolidated Financial Statements has been derived from our audited 2021 Consolidated Financial Statements in the Annual Report. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the interim period reporting provisions of U.S. GAAP and the SEC.

SDG&E, SoCalGas and Sempra Infrastructure’s natural gas distribution utility, Ecogas, prepare their financial statements in accordance with the provisions of U.S. GAAP governing rate-regulated operations. We discuss revenue recognition and the effects of regulation at our utilities in Notes 3 and 4 below and in Notes 1, 3 and 4 of the Notes to Consolidated Financial Statements in the Annual Report.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on Sempra’s Condensed Consolidated Balance Sheets to the sum of such amounts reported on Sempra’s Condensed Consolidated Statements of Cash Flows. We provide information about the nature of restricted cash in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.


RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	2,519	$	559
Restricted cash, current	14		19
Restricted cash, noncurrent	3		3
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows	$	2,536	$	581

We are exposed to credit losses from financial assets measured at amortized cost, including trade and other accounts receivable, amounts due from unconsolidated affiliates, our net investment in sales-type leases and a note receivable. We are also exposed to credit losses from off-balance sheet arrangements through Sempra’s guarantee related to Cameron LNG JV’s SDSRA, which we discuss in Note 6.

We regularly monitor and evaluate credit losses and record allowances for expected credit losses, if necessary, for trade and other accounts receivable using a combination of factors, including past-due status based on contractual terms, trends in write-offs, the age of the receivables and customer payment patterns, historical and industry trends, counterparty creditworthiness, economic conditions and specific events, such as bankruptcies, pandemics and other factors. We write off financial assets measured at amortized cost in the period in which we determine they are not recoverable. We record recoveries of amounts previously written off when it is known that they will be recovered.

In 2021, SDG&E and SoCalGas applied, on behalf of their customers, for financial assistance from the California Department of Community Services and Development under the California Arrearage Payment Program, which provided funds of $63 million and $79 million for SDG&E and SoCalGas, respectively. In the first quarter of 2022, SDG&E and SoCalGas received and applied the amounts directly to eligible customer accounts to reduce past due balances.


RECEIVABLES – ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	2022		2021
Sempra:
Allowances for credit losses at January 1	$	136	$	138
Provisions for expected credit losses	48		43
Write-offs	(19)		(5)
Allowances for credit losses at March 31	$	165	$	176
SDG&E:
Allowances for credit losses at January 1	$	66	$	69
Provisions for expected credit losses	21		15
Write-offs	(9)		(3)

Allowances for credit losses at March 31	$	78	$	81
SoCalGas:
Allowances for credit losses at January 1	$	69	$	68
Provisions for expected credit losses	26		28
Write-offs	(10)		(2)
Allowances for credit losses at March 31	$	85	$	94


ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	March 31,		December 31,
	2022		2021
Sempra:
Accounts receivable – trade, net	$	125	$	94
Accounts receivable – other, net	38		39
Other long-term assets	2		3
Total allowances for credit losses	$	165	$	136
SDG&E:
Accounts receivable – trade, net	$	55	$	42
Accounts receivable – other, net	22		22
Other long-term assets	1		2
Total allowances for credit losses	$	78	$	66
SoCalGas:
Accounts receivable – trade, net	$	68	$	51
Accounts receivable – other, net	16		17
Other long-term assets	1		1
Total allowances for credit losses	$	85	$	69

As we discuss below in “Transactions with Affiliates,” we have loans due from unconsolidated affiliates with varying tenors, interest rates and currencies. On a quarterly basis, we evaluate credit losses and record allowances for expected credit losses on amounts due from unconsolidated affiliates, if necessary, based on credit quality indicators such as external credit ratings, published default rate studies, the maturity date of the instrument and past delinquencies. However, we do not record allowances for expected credit losses related to accrued interest receivable on loans due from unconsolidated affiliates because we write off such amounts, if any, through a reversal of interest income in the period we determine such amounts are uncollectible. In the absence of external credit ratings, we may utilize an internally developed credit rating based on our analysis of a counterparty’s financial statements to determine our expected credit losses. At December 31, 2021, $1 million of expected credit losses is included in noncurrent Due From Unconsolidated Affiliates on Sempra’s Condensed Consolidated Balance Sheet.

As we discuss below in “Note Receivable,” we have an interest-bearing promissory note due from KKR. On a quarterly basis, we evaluate credit losses and record allowances for expected credit losses on this note receivable, including compounded interest and unamortized transaction costs, based on published default rate studies, the maturity date of the instrument and an internally developed credit rating. At March 31, 2022 and December 31, 2021, $7 million and $8 million, respectively, of expected credit losses are included in Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheets.


INVENTORY BALANCES
(Dollars in millions)
	Sempra				SDG&E				SoCalGas
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Natural gas	$	129	$	164	$	—	$	—	$	87	$	114
LNG	22		27		—		—		—		—
Materials and supplies	201		198		123		123		62		58
Total	$	352	$	389	$	123	$	123	$	149	$	172

In October 2021, Sempra loaned $300 million to KKR in exchange for an interest-bearing promissory note that is due in full no later than October 2029 and bears compound interest at 5% per annum, which may be paid quarterly or added to the outstanding principal at the election of KKR. At March 31, 2022 and December 31, 2021, Other Long-Term Assets includes $304 million and $297 million, respectively, of outstanding principal, compounded interest and unamortized transaction costs, net of allowance for credit losses, and at December 31, 2021, Other Current Assets includes $3 million of interest receivable on Sempra’s Condensed Consolidated Balance Sheets.

SDG&E’s power procurement is subject to reliability requirements that may require SDG&E to enter into various PPAs that include variable interests. SDG&E evaluates the respective entities to determine if variable interests exist and, based on the qualitative and quantitative analyses described above, if SDG&E, and indirectly Sempra, is the primary beneficiary.

SDG&E has agreements under which it purchases power generated by facilities for which it supplies all of the natural gas to fuel the power plant (i.e., tolling agreements). SDG&E’s obligation to absorb natural gas costs may be a significant variable interest. In addition, SDG&E has the power to direct the dispatch of electricity generated by these facilities. Based on our analysis, the ability to direct the dispatch of electricity may have the most significant impact on the economic performance of the entity owning the generating facility because of the associated exposure to the cost of natural gas, which fuels the plants, and the value of electricity produced. To the extent that SDG&E (1) is obligated to purchase and provide fuel to operate the facility, (2) has the power to direct the dispatch, and (3) purchases all of the output from the facility for a substantial portion of the facility’s useful life, SDG&E may be the primary beneficiary of the entity owning the generating facility. SDG&E determines if it is the primary beneficiary in these cases based on a qualitative approach in which it considers the operational characteristics of the facility, including its expected power generation output relative to its capacity to generate and the financial structure of the entity, among other factors. If SDG&E determines that it is the primary beneficiary, SDG&E and Sempra consolidate the entity that owns the facility as a VIE.

In addition to tolling agreements, other variable interests involve various elements of fuel and power costs, and other components of cash flows expected to be paid to or received by our counterparties. In most of these cases, the expectation of variability is not substantial, and SDG&E generally does not have the power to direct activities, including the operation and maintenance activities of the generating facility, that most significantly impact the economic performance of the other VIEs. If our ongoing evaluation of these VIEs were to conclude that SDG&E becomes the primary beneficiary and consolidation by SDG&E becomes necessary, the effects could be significant to the financial position and liquidity of SDG&E and Sempra.

SDG&E determined that none of its PPAs and tolling agreements resulted in SDG&E being the primary beneficiary of a VIE at March 31, 2022 and December 31, 2021. PPAs and tolling agreements that relate to SDG&E’s involvement with VIEs are primarily accounted for as finance leases. The carrying amounts of the assets and liabilities under these contracts are included in PP&E, net, and finance lease liabilities with balances of $1,212 million and $1,217 million at March 31, 2022 and December 31, 2021, respectively. SDG&E recovers costs incurred on PPAs, tolling agreements and other variable interests through CPUC-approved long-term power procurement plans. SDG&E has no residual interest in the respective entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 16 of the Notes to Consolidated Financial Statements in the Annual Report. As a result, SDG&E’s potential exposure to loss from its variable interest in these VIEs is not significant.

Our 100% interest in Oncor Holdings is a VIE that owns an 80.25% interest in Oncor. Sempra is not the primary beneficiary of this VIE because of the structural and operational ring-fencing and governance measures in place that prevent us from having the power to direct the significant activities of Oncor Holdings. As a result, we do not consolidate Oncor Holdings and instead account for our ownership interest as an equity method investment. See Note 6 of the Notes to Consolidated Financial Statements in the Annual Report for additional information about our equity method investment in Oncor Holdings and restrictions on our ability to influence its activities. Our maximum exposure to loss, which fluctuates over time, from our interest in Oncor Holdings does not exceed the carrying value of our investment, which was $13,116 million at March 31, 2022 and $12,947 million at December 31, 2021.

Cameron LNG JV is a VIE principally due to contractual provisions that transfer certain risks to customers. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of Cameron LNG JV, including LNG production and operation and maintenance activities at the liquefaction facility. Therefore, we account for our investment in Cameron LNG JV under the equity method. The carrying value of our investment, including amounts recognized in AOCI related to interest-rate cash flow hedges at Cameron LNG JV, was $623 million at March 31, 2022 and $514 million at December 31, 2021. Our maximum exposure to loss, which fluctuates over time, includes the carrying value of our investment and our obligation under the SDSRA, which we discuss in Note 6.

As we discuss in Note 6, in July 2020, Sempra entered into a Support Agreement for the benefit of CFIN, which is a VIE. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of CFIN, including modification, prepayment, and refinance decisions related to the financing arrangement with external lenders and Cameron LNG JV’s four project owners as well as the ability to determine and enforce remedies in the event of default. The conditional obligations of the Support Agreement represent a variable interest that we measure at fair value on a recurring basis (see Note 9). Sempra’s maximum exposure to loss under the terms of the Support Agreement is $979 million.

ECA LNG Phase 1 is a VIE because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. We expect that ECA LNG Phase 1 will require future capital contributions or other financial support to finance the construction of the facility. Sempra is the primary beneficiary of this VIE because we have the power to direct the development activities related to the construction of the liquefaction facility, which we consider to be the most significant activities of ECA LNG Phase 1 during the construction phase of its natural gas liquefaction export project. As a result, we consolidate ECA LNG Phase 1. Sempra consolidated $728 million and $632 million of assets at March 31, 2022 and December 31, 2021, respectively, consisting primarily of PP&E, net, and Accounts Receivable – Other attributable to ECA LNG Phase 1 that could be used only to settle obligations of this VIE and that are not available to settle obligations of Sempra, and $528 million and $455 million of liabilities at March 31, 2022 and December 31, 2021, respectively, consisting primarily of long-term debt, short-term debt and accounts payable attributable to ECA LNG Phase 1 for which creditors do not have recourse to the general credit of Sempra. Additionally, as we discuss in Note 7, Sempra and TotalEnergies SE have provided guarantees for the loan facility supporting construction of the liquefaction facility based on their respective proportionate ownership interest in ECA LNG Phase 1.


NET PERIODIC BENEFIT COST – SEMPRA
(Dollars in millions)
	Pension benefits				Other postretirement benefits














	Three months ended March 31,
	2022		2021		2022		2021
Service cost	$	41	$	37	$	7	$	6
Interest cost	30		28		7		7
Expected return on assets	(46)		(43)		(16)		(15)
Amortization of:
Prior service cost (credit)	3		3		(1)		(1)
Actuarial loss (gain)	6		11		(4)		(2)
Settlement charges	—		7		—		—
Net periodic benefit cost (credit)	34		43		(7)		(5)
Regulatory adjustments	(27)		(29)		7		5
Total expense recognized	$	7	$	14	$	—	$	—


NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
	Pension benefits				Other postretirement benefits














	Three months ended March 31,
	2022		2021		2022		2021
Service cost	$	10	$	8	$	2	$	1
Interest cost	7		6		1		1
Expected return on assets	(11)		(12)		(2)		(2)
Amortization of:
Actuarial gain	—		—		(1)		—
Net periodic benefit cost	6		2		—		—
Regulatory adjustments	(5)		(2)		—		—
Total expense recognized	$	1	$	—	$	—	$	—


NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended March 31,














	2022		2021		2022		2021
Service cost	$	28	$	25	$	5	$	4
Interest cost	20		20		5		5
Expected return on assets	(31)		(28)		(13)		(12)
Amortization of:
Prior service cost (credit)	2		2		(1)		(1)
Actuarial loss (gain)	4		9		(3)		(1)
Net periodic benefit cost (credit)	23		28		(7)		(5)
Regulatory adjustments	(22)		(27)		7		5
Total expense recognized	$	1	$	1	$	—	$	—

In support of its Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans, Sempra maintains dedicated assets, including a Rabbi Trust and investments in life insurance contracts, which totaled $532 million and $567 million at March 31, 2022 and December 31, 2021, respectively.

Basic EPS is calculated by dividing earnings attributable to common shares by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.


EARNINGS PER COMMON SHARE COMPUTATIONS
(Dollars in millions, except per share amounts; shares in thousands)
	Three months ended March 31,
		2022		2021
Numerator:
Earnings attributable to common shares for basic EPS		$	612	$	874
Add back dividends for dilutive mandatory convertible preferred stock(1)		—		10
Earnings attributable to common shares for diluted EPS		$	612	$	884

Denominator:
Weighted-average common shares outstanding for basic EPS(2)		316,353		300,905
Dilutive effect of stock options and RSUs(3)		1,081		887
Dilutive effect of mandatory convertible preferred stock		—		6,666
Weighted-average common shares outstanding for diluted EPS		317,434		308,458

EPS:
Basic		$	1.93	$	2.91
Diluted		$	1.93	$	2.87

(2) Includes 407 and 460 fully vested RSUs held in our Deferred Compensation Plan for the three months ended March 31, 2022 and 2021, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.

(3) Due to market fluctuations of both Sempra common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.

The potentially dilutive impact from stock options and RSUs is calculated under the treasury stock method. Under this method, proceeds based on the exercise price and unearned compensation are assumed to be used to repurchase shares on the open market at the average market price for the period, reducing the number of potential new shares to be issued and sometimes causing an antidilutive effect. The computation of diluted EPS for the three months ended March 31, 2022 and 2021 excludes 337,239 and 428,875 potentially dilutive shares, respectively, because to include them would be antidilutive for the period. However, these shares could potentially dilute basic EPS in the future.

In 2021, the potentially dilutive impact from mandatory convertible preferred stock was calculated under the if-converted method until the mandatory conversion date. After the mandatory conversion date, the converted shares are included in weighted-average common shares outstanding for basic EPS. We converted our series A preferred stock into common stock on January 15, 2021 and our series B preferred stock into common stock on July 15, 2021. We do not have mandatory convertible preferred stock outstanding as of March 31, 2022, and there were no antidilutive shares to exclude from the computation of diluted EPS in the three months ended March 31, 2021.


CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)
	Foreign currency translation adjustments		Financial instruments		Pension and other postretirement benefits		Total accumulated other comprehensive income (loss)
	Three months ended March 31, 2022 and 2021
Sempra:
Balance at December 31, 2021	$	(79)	$	(156)	$	(83)	$	(318)
OCI before reclassifications	3		74		6		83
Amounts reclassified from AOCI	—		4		2		6
Net OCI	3		78		8		89
Balance at March 31, 2022	$	(76)	$	(78)	$	(75)	$	(229)

Balance at December 31, 2020	$	(64)	$	(331)	$	(105)	$	(500)

OCI before reclassifications	(5)		73		7		75
Amounts reclassified from AOCI	—		19		7		26
Net OCI	(5)		92		14		101
Balance at March 31, 2021	$	(69)	$	(239)	$	(91)	$	(399)
SDG&E:




Balance at December 31, 2021 and March 31, 2022					$	(10)	$	(10)





Balance at December 31, 2020 and March 31, 2021					$	(10)	$	(10)
SoCalGas:
Balance at December 31, 2021			$	(13)	$	(18)	$	(31)

Amounts reclassified from AOCI			—		1		1
Net OCI			—		1		1
Balance at March 31, 2022			$	(13)	$	(17)	$	(30)




Balance at December 31, 2020 and March 31, 2021			$	(13)	$	(18)	$	(31)


RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about accumulated other comprehensive income (loss) components	Amounts reclassified from accumulated other comprehensive income (loss)				Affected line item on Condensed Consolidated Statements of Operations
	Three months ended March 31,
	2022		2021
Sempra:


Financial instruments:
Interest rate instruments	$	(1)	$	2	Interest Expense
Interest rate instruments	14		19		Equity Earnings(1)
Foreign exchange instruments	(1)		1		Revenues: Energy-Related Businesses
Foreign exchange instruments	(1)		1		Equity Earnings(1)

Interest rate and foreign exchange instruments	(6)		6		Other Income, Net
Total before income tax	5		29
	(1)		(8)		Income Tax Expense
Net of income tax	4		21
	—		(2)		Earnings Attributable to Noncontrolling Interests
	$	4	$	19
Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	2	$	2	Other Income, Net

Amortization of prior service cost	1		1		Other Income, Net
Settlement charges	—		7		Other Income, Net
Total before income tax	3		10

	(1)		(3)		Income Tax Expense
Net of income tax	$	2	$	7

Total reclassifications for the period, net of tax	$	6	$	26









SoCalGas:


Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	1	$	—	Other Income, Net





Total reclassifications for the period, net of tax	$	1	$	—

On January 15, 2021, we converted all 17,250,000 shares of series A preferred stock into 13,781,025 shares of our common stock based on a conversion rate of 0.7989 shares of our common stock for each issued and outstanding share of series A preferred stock. As a consequence, no shares of series A preferred stock were outstanding after January 15, 2021 and the 17,250,000 shares that were formerly series A preferred stock returned to the status of authorized and unissued shares of preferred stock.

On January 11, 2022, we entered into an ASR program under which we prepaid $200 million to repurchase shares of our common stock in a share forward transaction. A total of 1,472,756 shares were purchased under this program at an average price of $135.80 per share. The total number of shares purchased was determined by dividing the $200 million purchase price by the arithmetic average of the volume-weighted average trading prices of shares of our common stock during the valuation period of January 12, 2022 through February 11, 2022, minus a fixed discount. The ASR program was completed on February 11, 2022.

On April 6, 2022, we entered into an ASR program under which we prepaid $250 million to repurchase shares of our common stock in a share forward transaction. A total of 1,471,957 shares were purchased under this program at an average price of $169.84 per share. The total number of shares purchased was determined by dividing the $250 million purchase price by the arithmetic average of the volume-weighted average trading prices of shares of our common stock during the valuation period of April 7, 2022 through April 25, 2022, minus a fixed discount. The ASR program was completed on April 25, 2022.


OTHER NONCONTROLLING INTERESTS
(Dollars in millions)
	Percent ownership held by noncontrolling interests				Equity held by noncontrolling interests
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Sempra Infrastructure:
SI Partners	20.0	%	20.0	%	$	1,387	$	1,384
SI Partners subsidiaries(1)	0.1 - 16.6		0.1 - 16.6		39		34
Total Sempra					$	1,426	$	1,418

Pending Sale of NCI in SI Partners to ADIA. On December 21, 2021, Sempra entered into a purchase and sale agreement (the ADIA Purchase Agreement) with ADIA, and, solely for purposes of guaranteeing the obligations of ADIA, Infinity Investments S.A. and Azure Vista C 2020 S.à.r.l., each a wholly owned affiliate of Abu Dhabi Investment Authority, pursuant to which ADIA will acquire from Sempra, for an aggregate purchase price of $1.8 billion, subject to certain adjustments described below, a 10% NCI in SI Partners. Following the closing of the transaction pursuant to the ADIA Purchase Agreement, Sempra, KKR and ADIA will directly or indirectly own 70%, 20%, and 10%, respectively, of the outstanding Class A Units of SI Partners, which excludes the non-voting Sole Risk Interests held only by Sempra. As further described below, after the closing of the transaction under the ADIA Purchase Agreement, ADIA will have certain rights similar to those of KKR but subject to additional limitations and adjustments to take into account ADIA’s relative ownership percentage.

At March 31, 2022, SI Partners indirectly owned 99.9% of the outstanding shares of IEnova. Under the terms of the ADIA Purchase Agreement, there will be a proportional purchase price adjustment at the closing (i) for any remaining shares of IEnova that are not owned by SI Partners at the closing and (ii) that generally takes into account cash distributions made to, or capital contributions made by, the partners of SI Partners, from and after the date of the ADIA Purchase Agreement to the closing.

In the first quarter of 2022, we made significant progress toward obtaining the regulatory approvals necessary to close the transaction pursuant to the ADIA Purchase Agreement. As a result of the anticipated closing, we recognized income tax expense of $120 million for a deferred income tax liability related to outside basis differences in our foreign subsidiaries that we had previously considered to be indefinitely reinvested.

The closing of the transaction pursuant to the ADIA Purchase Agreement is subject to receipt of certain regulatory approvals, including from the FERC and DOE; certain other third-party approvals; the absence of a material adverse effect on the assets, businesses, properties, liabilities, financial condition or results of operations of SI Partners taken as a whole, subject to certain exceptions; and other customary closing conditions. Any party may generally terminate the ADIA Purchase Agreement if the closing has not occurred on or before September 30, 2022, subject to an automatic extension through December 21, 2022 if necessary to receive required regulatory approvals. We expect the transaction will close in the second quarter of 2022.

At the closing, Sempra and KKR and ADIA (the Minority Partners) will enter into a second amended and restated agreement of limited partnership of SI Partners (the Amended LP Agreement), which will govern their respective rights and obligations in respect of their ownership of SI Partners. Under the Amended LP Agreement, ADIA will have the right at the closing to designate one manager to the SI Partners board of managers. Matters are decided generally by majority vote and the managers designated by Sempra and by KKR each, as a group, have voting power equivalent to the ownership percentage of their respective designating limited partner. The manager selected by ADIA also will have voting power equivalent to the ownership percentage of ADIA. Sempra expects to maintain control of SI Partners as its 70% owner on terms similar to those currently applicable at SI Partners. However, SI Partners and its controlled subsidiaries will be prohibited from taking certain limited actions without the prior written

The terms of the Amended LP Agreement applicable to ADIA in relation to capital contributions and distributions are generally consistent with those granted to KKR, with adjustments and limitations to take into account ADIA’s relative ownership percentage, including limiting ADIA’s priority distribution rights to the failure of certain proposed projects to receive a positive final investment decision by a certain date or to achieve specified thresholds of projected internal rates of return or leverage. The transfer rights and restrictions and registration rights in the Amended LP Agreement applicable to ADIA are also generally consistent with those granted to KKR, with adjustments and limitations to take into account ADIA’s relative ownership percentage, including a general restriction on ADIA transferring its interests in SI Partners to third parties (other than pursuant to certain specified permitted transfers) for a specified period following its entry into the Amended LP Agreement.

SI Partners Subsidiaries. Following the exchange offer completed in May 2021 and the cash tender offer completed in September 2021, IEnova’s shares were delisted from the Mexican Stock Exchange effective October 15, 2021. In connection with the delisting, we are maintaining a trust for the purpose of purchasing the 1,212,981 IEnova shares that remained publicly owned as of the completion of the cash tender offer for 78.97 Mexican pesos per share, the same price per share that was offered in our cash tender offer. The trust was to be in place through the earlier of April 14, 2022 or the date on which we acquire all the remaining publicly owned IEnova shares. On April 13, 2022, the term of the trust was amended so that it will remain in place until we terminate it, subject to any maximum term under applicable Mexican law. As of April 29, 2022, an aggregate of 828,988 of the remaining publicly owned IEnova shares had been acquired by such trust.


AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	March 31, 2022		December 31, 2021
Sempra:
Sempra Infrastructure – IMG – Note due March 15, 2023(1)	$	626	$	2
Various affiliates	45		21
Total due from unconsolidated affiliates – current	$	671	$	23

Sempra Infrastructure – IMG – Note due March 15, 2022, net of allowance for credit losses of $1 at December 31, 2021(1)	$	—	$	637
Total due from unconsolidated affiliates – noncurrent	$	—	$	637




Sempra Infrastructure(2):
TAG Pipelines Norte, S. de R.L. de C.V.:
5.5% Note due January 9, 2024	$	(70)	$	(69)
5.5% Note due January 14, 2025	(22)		(21)
5.5% Note due July 16, 2025	(20)		(20)
5.5% Note due January 14, 2026	(18)		—
TAG – 5.74% Note due December 17, 2029	(179)		(177)
Total due to unconsolidated affiliates – noncurrent	$	(309)	$	(287)
SDG&E:
Various affiliates	$	1	$	—
Total due from unconsolidated affiliates – current	$	1	$	—

Sempra	$	(51)	$	(40)
SoCalGas	(43)		(48)
Various affiliates	(11)		(9)
Total due to unconsolidated affiliates – current	$	(105)	$	(97)

Income taxes due (to) from Sempra(3)	$	(41)	$	19
SoCalGas:
SDG&E	$	43	$	48
Various affiliates	1		1
Total due from unconsolidated affiliates – current	$	44	$	49

Sempra	$	(45)	$	(36)
Total due to unconsolidated affiliates – current	$	(45)	$	(36)

Income taxes due from Sempra(3)	$	6	$	6

(1) At December 31, 2021, represents a Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $691 U.S. dollar-equivalent at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps. On March 15, 2022, Sempra Infrastructure amended and restated the revolving line of credit to a U.S. dollar-denominated note in the amount of $625 at a variable interest rate based on the 1-month Secured Overnight Financing Rate plus 180 bps (2.22% at March 31, 2022) and extended the maturity date to March 15, 2023. At March 31, 2022 and December 31, 2021, $1 and $2 of accrued interest receivable, respectively, is included in Due from Unconsolidated Affiliates – Current.


OTHER INCOME, NET
(Dollars in millions)
	Three months ended March 31,
		2022		2021
Sempra:
Allowance for equity funds used during construction		$	35	$	38
Investment (losses) gains, net(1)		(13)		9
Gains (losses) on interest rate and foreign exchange instruments, net		6		(30)
Foreign currency transaction losses, net(2)		(19)		(19)
Non-service component of net periodic benefit credit		41		29

Interest on regulatory balancing accounts, net		1		1
Sundry, net		(13)		7
Total		$	38	$	35
SDG&E:
Allowance for equity funds used during construction		$	21	$	23
Non-service component of net periodic benefit credit		11		9
Interest on regulatory balancing accounts, net		1		1
Sundry, net		1		2
Total		$	34	$	35
SoCalGas:
Allowance for equity funds used during construction		$	13	$	12
Non-service component of net periodic benefit credit		32		28


Sundry, net		(11)		(1)
Total		$	34	$	39


INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
	Three months ended March 31,
		2022			2021
Sempra:
Income tax expense		$	334		$	158

Income before income taxes and equity earnings		$	665		$	768
Equity earnings, before income tax(1)		143			135
Pretax income		$	808		$	903

Effective income tax rate		41		%	18		%
SDG&E:
Income tax expense		$	64		$	45
Income before income taxes		$	298		$	257
Effective income tax rate		21		%	18		%
SoCalGas:
Income tax expense		$	84		$	94
Income before income taxes		$	418		$	501
Effective income tax rate		20		%	19		%

For SDG&E and SoCalGas, the CPUC requires flow-through rate-making treatment for the current income tax benefit or expense arising from certain property-related and other temporary differences between the treatment for financial reporting and income tax, which will reverse over time. Under the regulatory accounting treatment required for these flow-through temporary differences, deferred income tax assets and liabilities are not recorded to deferred income tax expense, but rather to a regulatory asset or liability, which impacts the ETR. As a result, changes in the relative size of these items compared to pretax income, from period to period, can cause variations in the ETR. The following items are subject to flow-through treatment: